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Overview of Firm-Size and Gender Pay Gaps in Turkey: The Role of Informal Employment

  • Gizem Akar

    ()

    (Middle East Technical University)

  • Binnur Balkan

    ()

    (Central Bank of the Republic of Turkey)

  • Semih Tümen

    ()

    (Central Bank of the Republic of Turkey)

This paper documents two new findings linking firm-size and gender pay gaps to informal employment using micro-level data from Turkey. First, we show that the firm-size wage gap, defined as larger firms paying higher wages to observationally equivalent workers, is greater for informal employment than formal employment. And, second, we find that the gender pay gap is constant across different firm-size categories for formal employment, while it is a decreasing function of firm size for informal employment. These two facts jointly suggest that the informality status of a job is a valuable source of information in understanding the underlying forces determining firm-size and gender wage gaps. We propose and discuss the relevance of alternative mechanisms that might be generating these facts.

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Article provided by Turkish Economic Association in its journal Ekonomi-tek.

Volume (Year): 2 (2013)
Issue (Month): 3 (September)
Pages: 1-21

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Handle: RePEc:tek:journl:v:2:y:2013:i:3:p:1-21
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